Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

ASX 200 eases ahead of US election amid RBA's hawkish rate hold

The ASX 200 fluctuates as bank stocks decline due to broker downgrades, while China's fiscal stimulus hopes uplift mining. RBA's rate decision and future announcements will shape Australia's market.

ASX Source: Adobe images

The ASX 200 trades 24 points lower (-0.55%) at 8140 as of 3.15pm AEDT.

RBA holds rates steady as inflation remains above target

The ASX 200 has declined today on light trading volumes as markets await tomorrow’s US election and the Reserve Bank of Australia’s (RBA) decision to keep interest rates unchanged at 4.35% for the eighth consecutive meeting.

In its accompanying statement, the RBA noted that while higher interest rates are working to balance demand with supply, underlying inflation - as measured by the trimmed mean - remains at 3.5% and is 'still some way from the 2.5 per cent midpoint of the inflation target.' According to today’s Statement on Monetary Policy, inflation is not expected to sustainably reach this target midpoint until 2026.

The RBA anticipated last week’s third quarter (Q3) decrease in headline inflation, which it attributed to 'declines in fuel and electricity prices during the September quarter.' However, the bank added that 'underlying inflation is more indicative of inflation momentum, and it remains too high.'

Labour market and productivity remain areas of concern

The RBA highlighted the strength of the labour market, noting that 'labour market conditions remain tight.' Additionally, concerns around low productivity were acknowledged, stating that 'labour productivity is still only at 2016 levels,' despite some improvement over the past year.

The RBA reiterated that the Board is 'not ruling anything in or out.' The statement concluded, 'the Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.'

In the Statement on Monetary Policy, the RBA lowered its forecast for end-2024 gross domestic product (GDP) growth from 1.7% to 1.5% and adjusted its forecasts for headline and trimmed-mean inflation to 2.6% year-over-year (YoY) (down from 3%) and 3.4% YoY (from 3.5%), respectively.

Today’s RBA message is clear that inflation remains too high, deferring any rate cuts until inflation aligns with targets. The rates market is currently pricing in a 4 basis point (bp) (17% chance) cut for December, with the first 25 bp cut anticipated at the May meeting.

Key data ahead of the RBA’s 10 December meeting

Upcoming economic data that may influence the RBA’s December decision include:

  • October labour force report: Thursday, 14 November
  • Monthly consumer price index (CPI) indicator: Wednesday, 27 November
  • Q3 GDP: Wednesday, 4 December

ASX 200 stocks

Banking sector

Major banks have declined after a broker downgrade to Westpac following its earnings report yesterday.

  • Macquariefell 1.55% to $218.90
  • Westpac lost 1.5% to $31.92
  • CBA slipped 0.71% to $143.32
  • ANZ edged 0.58% lower to $31.08

Mining sector

Hopes that China's NPC meeting will announce fiscal stimulus details later this week have lifted the mining sector.

ASX 200 technical analysis

The ASX 200 spent last week below multi-month trend channel resistance, currently around 8350 - 8360, and above key support at 8110 - 8100. A break through either level will signal the index’s next significant move.

ASX 200 daily chart

ASX 200 daily chart Source: TradingView
ASX 200 daily chart Source: TradingView
  • Source: TradingView. The figures stated are as of 5 November 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Explore the markets with our free course

Discover the range of markets you can spread bet on - and learn how they work - with IG Academy's online course.

Turn knowledge into success

Practice makes perfect. Take what you’ve learned in this index strategy article, and try it out risk-free in your demo account.

Ready to trade indices?

Put the lessons in this article to use in a live account. Upgrading is quick and simple.

  • Get fixed spreads from 1 point on FTSE 100 and Germany 40
  • Protect your capital with risk management tools
  • Trade more 24-hour markets than any other provider – 26 in total

Inspired to trade?

Put the knowledge you’ve gained from this article into practice. Log in to your account now.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.